Florence threatens more than a million homes without flood insurance

Posted: 9:08 AM, Sep 15, 2018
Updated: 2018-09-15 09:08:09-04
Florence threatens more than a million homes without flood insurance

Most people in the path of Florence don't have flood insurance, and many won't have the money to rebuild if their homes are damaged or destroyed by the storm's onslaught of water.

Standard homeowners insurance policies cover wind damage, but they don't cover damage from rain or floodwaters, such as storm surge or overflowing rivers.

Much of the damage from Florence will be caused by rainfall. The slow-moving tropical storm, which was downgraded from a Category 1 hurricane Friday, could bring flooding far beyond the North and South Carolina coastlines.

But most homes in the Carolinas don't have federal flood insurance coverage, which is offered by FEMA. Of the 7 million homes in the two states, only about 340,000, or 5 percent, are covered under the federal program.



Even in those areas, some homes aren't covered. Some homeowners don't have a mortgage, and in other cases the owners have let the flood insurance lapse and the mortgage lender doesn't know.




"The flood zone delineations are just wrong," Watson said. "But communities don't like expanding flood zones, because it makes development more expensive and difficult. So the flood zones really don't reflect the risk."

Many homeowners living outside the flood zones don't know they aren't covered, or wrongly think they can't buy or afford federal flood insurance, which might run only a few hundred dollars a year.

Watson said it doesn't make sense to have separate insurance coverage for different types of damage to a home and its contents.

"When you have car insurance, you don't have one policy if you're hit by a Toyota, another if you're hit by a BMW," he said. But that's the way the insurance market has developed in the United States.

Even some homeowners who are covered will find out they don't have enough coverage to rebuild.

The federal program caps coverage at $250,000 per structure, and $100,000 for lost property -- well below the cost of replacement in many cases. Excess coverage is available from private insurers, but, once again, many homeowners are unaware of the limits of their coverage.

